North Dakota Economic Development

Number of local economic organizations:

About 280, according to an informal listing obtained from the state
Department of Economic Development and Finance. This includes regional,
(multi-)county and (multi-)city economic development entities, private
nonprofits and a few private organizations (no chambers of commerce);
only about 50 are estimated to have full- or part-time paid staff.

Unique local economic development tools or incentives:

Two taxing vehicles provide funding for operations of local development
organizations and business assistance packages. Cities are allowed
to add up to 1 cent onto the state's sales tax, and cities and counties
are also allowed to levy an additional mil onto property taxes to
specifically fund economic development activities. Last year, the
state also approved the Renaissance Zone Program, modeling it after
the Michigan program of the same name. Fargo is currently the only
city with a renaissance zone, although other cities are said to
be working on necessary applications.

Popular assistance tools or incentives:

The Development Fund, a gap financing mechanism, invested $3.6
million in 19 projects in 1997, and financed 99 projects to the
tune of $20 million from 1991 to 1997. Also popular is the Partnership
in Assisting Community Expansion (PACE), an interest write-down
program through the Bank of North Dakota, according to local economic
development practitioners.

Other assistance tools or incentives:

State financing vehicles include as many as nine different low-cost
loan and other financing programs through the Bank of North Dakota
(the only state-owned bank in the country). The state also offers
a number of property, sales and income tax exemptions running up
to five years for qualified new or expanding businesses. Tax increment
financing (TIF) and the Regional Rural Development Revolving Loan
Fund are also available to local communities.

Notable:

TIF is not widely used in the state because only the land and original
buildingno equipmentis used to calculate the base value
and subsequent "increment" value of a TIF property. As a result,
property valuations tend to go up very slowly, which fails to generate
the revenue necessary to pay off bonds issued for the capital improvements.